Resolve Beef and Auto Issues, Then Move on Korean Trade Deal

News accounts today reflect determination both by top U.S. and Korean officials that the outstanding auto and beef issues in the U.S.-Korea FTA will be addressed by the Seoul G-20 meeting on Nov. 11 and 12. From the U.S. side, Deputy Assistant to the President and Deputy National Security Advisor for International Economic Affairs and Development Michael Froman said yesterday at a White House press briefing: “We will be putting every effort into achieving an acceptable agreement, a satisfactory agreement by the time the president goes to the G-20.” Mr. Froman also noted that the U.S. negotiators are expending “maximum effort” in order to resolve “all of the issues” related to the KORUS agreement.

Secretary of State Hillary Clinton, in a speech in Honolulu on Oct. 28, noted that the U.S. and Korea “enjoy a vibrant economic relationship, which is why our two Presidents have called for resolving the outstanding issues related to the U.S.-Korea Free Trade Agreement by the time of the G-20 meeting in Seoul.” Secretary Clinton returned to trade later in her speech, noting not only the importance of the KORUS FTA but its key starting role in a larger U.S. pro-trade agenda for 2011 focused on Asia-Pacific.

This messaging is also reflected in today’s Korean press, which are reporting that President Obama and President Lee talked by phone. Korea’s official news agency Yonhap reports “In their telephone talks, the leaders agreed that the FTA ‘should be forged to promote free trade in the world and upgrade the South Korea-U.S. alliance by a notch,’ and that “they agreed to try to reach a compromise before the Seoul G-20 summit from Nov. 11-12.”

It is a very positive sign when very senior officials continue to reiterate their hope and desire to wrap up discussions on the automotive and beef issues still outstanding in the KORUS FTA as the deadline approaches. It is also a good sign that these talks are referred to on both sides as “discussions” rather than “negotiations.” Secretary Clinton’s remarks that put the KORUS agreement at the head of an ambitious trade agenda are heartening. We would suggest that our pending FTAs with Colombia and Panama also be added to that agenda (both border the Pacific Ocean). But this all hinges on finalizing a deal on autos and beef. We encourage both sides to keep moving forward over the next 10 days.

The National Association of Manufacturers has been a strong supporter of the KORUS agreement, but has also always said that more was needed to address the auto industry’s concerns on market access in Korea. We are hopeful that agreement on this is near.